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Canadians have polarizing views on evolving payment innovations with security concerns being top-of-mind, reveals new Payments Canada study
Wednesday, February 26, 2025
The appeal of new technologies such as GenAI, social commerce, passkeys and pay-by-bank are viewed through a 'security first' lens by Canadians.
OTTAWA, ON, Feb. 18, 2025 /CNW/ - Canadians are divided in embracing evolving technologies that have the potential to change our shopping experiences along with how we pay and get paid.
Concerns around security, lack of familiarity and a sense of contentment with existing payment and shopping experience technologies impact the appeal of newer innovations. This concern surrounds current and potential innovations like generative artificial intelligence (GenAI), social commerce and pay-by-bank reveals a new study from Payments Canada.
"Canadians prioritize security and privacy while also expecting ease and convenience in their shopping experience, particularly in the way they pay," said Jon Purther, Director of Research at Payments Canada. "They seek innovations that strike a balance between these factors. However, Canadians are divided on the appeal of innovations that have the potential to reshape our shopping and payment experiences, with security being a key concern. In our study, we also found that many Canadians had not yet formed a view around their appeal, which infers that they are reserving judgment until they become more familiar with newer technologies."
Key study findings:
Canadians have polarizing perspectives around leveraging GenAI (generative artificial intelligence). GenAI has many applications when it comes to making payments or receiving services. This includes generating personalized discounts or pricing for consumers, providing them with virtual shopping assistants such as chatbots or providing product recommendations. GenAI can also support fraud detection by flagging unusual transaction activities, predicting user payment preferences and auto-filling details to speed up the checkout process while also generating personalized loyalty programs.
-- Canadians are divided on using GenAI to improve their work and
lifestyle; 43% are interested in leveraging these technologies, 44% are
not interested and 13% are unsure.
-- Younger Canadians aged 18-34 have more interest (56%) than middle-aged
Canadians 35-54 (48%) and older Canadians aged 55+ (31%).
-- Fraud detection and prevention is thought to be the most beneficial way
of leveraging GenAI among Canadians (45%).
-- Canadians have mixed views on the appeal of GenAI to enhance the online
shopping experience; 28% consider it appealing, 34% say it's unappealing
to them and 38% say it's neither appealing nor unappealing.
-- GenAI-enhanced online shopping experiences are more appealing to younger
Canadians aged 18-34 (39%) compared to middle-aged Canadians (29%) and
older Canadians (21%).
More than 1 in 10 Canadians have used social media commerce but security concerns are a key deterrent. Social commerce enables consumers to buy and sell products directly through social media platforms without leaving the platform or app.
-- Overall, 12% of Canadians have sent or received money from a friend or
family member using social media platforms, such as Instagram, WhatsApp,
Messenger or TikTok.
-- Overall, 13% of Canadians have made a purchase within social media
platforms, such as Instagram, Pinterest and TikTok.
-- Social commerce appeals to around 1 in 5 Canadians (18%), with 46% who
say it is unappealing and 36% who say it's neither appealing nor
unappealing.
-- Of those who consider social commerce appealing, reasons include
convenience and ease (40%), useful and interesting (6%) and a
preferential way of purchasing items (5%).
-- Among those who do not find social commerce appealing, key concerns
include security (48%), not being of interest or useful (14%), not using
or liking social media (10%) and not wanting to make impulsive purchases
(5%).
Pay-by-bank, which allows consumers to make transactions directly from their bank account to the merchant, bypassing traditional payment methods like credit and debit cards, is appealing to 29% of Canadians. Consumers select pay-by-bank (also known as account-to-account) at checkout, typically on an e-commerce website, app or point-of-sale terminal, which then redirects the consumer to their online banking platform or app where they can then approve the transaction.
-- Overall, 29% of Canadians find pay-by-bank appealing, 33% do not find it
appealing and 38% are neutral.
-- Newcomers to Canada (53%) and gig workers (47%) are significantly more
likely to use pay-by-bank.
-- The key attraction of pay-by-bank is security with 32% of Canadians
indicating it offers greater security. This is because when making an
online purchase consumers do not have to enter their credit or debit
card information directly on the merchant site. Instead, they are
redirected to their online/mobile banking platform to confirm the
payment transaction. The payment is made via an account-to-account (A2A)
transfer directly from the consumer's bank account.
-- Incentives would encourage Canadians to use pay-by-bank, with 60% more
likely to use it with incentives such as cashback offers or rewards
points.
-- Only 22% of older Canadians would use pay-by-bank, compared to 34% of
young Canadians and 28% of middle-aged Canadians.
Half of Canadians (50%) find passkeys an appealing alternative method of user authentication that eliminates the need for usernames and passwords. Passkeys are integrated into online payments during checkout and linked to the consumer's bank account, digital wallet or card issuer, with the consumer being prompted to authenticate the purchase with a passkey on their device using biometrics (for example, their fingerprint, facial or voice recognition). Passkeys are considered more secure than passwords because there isn't a string of characters to memorize, making them harder to hack. Passkeys do not need to be changed, cannot be stolen by someone guessing or peeking over your shoulder, and there is no way to accidentally use one on the wrong website.
-- Overall, 47% of Canadians say they are likely to use passkeys instead of
passwords for logging into their email and online/mobile banking
accounts, or e-commerce sites if the option was available. However, 23%
do not find passkeys appealing, and 27% remain neutral.
-- Among those that do not find passkeys appealing, key concerns include it
being less secure (27%), lack of interest or need (20%), a perception of
complexity/finding it confusing (16%), lack of understanding (12%) and
lack of trust (7%).
About the study: 1,500 Canadians were interviewed online each wave, between February 26 and March 8, 2024, (wave 1) and between June 24 and July 5, 2024, (wave 2) using Leger's online panel. The margin of error for this study was +/ 2.5%, 19 times out of 20.
About Payments Canada: Payments Canada makes payments easier, smarter and safer for people living in Canada by providing secure and resilient infrastructure where payments are cleared and settled between financial institutions. We are a public purpose organization that owns and operates Canada's payment systems, Lynx, the Automated Clearing Settlement System (ACSS) and the forthcoming Real-Time Rail (RTR), and are responsible for the by-laws, rules and standards that support these systems. In 2024, our systems cleared and settled $107 trillion -- more than $424 billion every business day. Some of the transactions that pass through our systems include debit card payments, pre-authorized debits, direct deposits, bill payments, wire payments and cheques. Payments are an essential part of our economy and way of life. From a down payment on a home, an invoice paid to a local business or a first paycheque -- payments keep Canadians and the economy moving forward.
For media inquiries, please visit Payments Canada's media centre.
SOURCE Payments Canada
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